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EXHIBIT 10.44
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made and entered into as of
the 19th day of June, 1996, by and between GOODY'S FAMILY CLOTHING, INC., a
Tennessee corporation (the "Corporation"), and XXXXX X. XXXXXXXXXX
("Indemnitee").
WITNESSETH:
WHEREAS, the Indemnitee is a director or officer of the Corporation; and
WHEREAS, the Charter and Bylaws of the Corporation authorize the
indemnification of directors and officers of the Corporation; and
WHEREAS, the parties believe it appropriate to further memorialize and
reaffirm the Corporation's obligation to indemnify the Indemnitee as authorized
by the Charter and Bylaws of the Corporation;
NOW, THEREFORE, for and in consideration of the mutual agreements herein
contained, and other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Agreement to Indemnify.
(a) Obligation to Indemnify; Standards for Indemnification. Subject
to Section 3 hereof, the Corporation shall indemnify Indemnitee against any
liability, including the obligation to pay judgments, settlements,
penalties, fines (including any excise tax assessed with respect to an
employee benefit plan) and reasonable expenses (including counsel fees)
actually and reasonably incurred by the Indemnitee in connection with any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative and whether formal or
informal ("Proceeding") in which the Indemnitee was or is or is threatened
to be made a party because Indemnitee is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise if (i) Indemnitee acted in good faith;
(ii) Indemnitee reasonably believed that, in the case of conduct in his
Official Capacity (as such term is defined in Section 48-18-501(5) of the
Tennessee Code Annotated (the "Code") with the Corporation, his conduct was
in the best interests of the Corporation, or that, in all other cases, his
conduct was at least not opposed to the best interests of the Corporation;
and (iii) with respect to any criminal Proceeding, Indemnitee had no
reasonable cause to believe his conduct was unlawful. The termination of
any Proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, is not, of itself, determinative that
Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Corporation (as applicable), and, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(b) Court Ordered Indemnification. Notwithstanding any provision
herein to the contrary, Indemnitee may apply for indemnification to the
court conducting a Proceeding or another court of competent jurisdiction
and the court may order indemnification if it determines that (i) the
Indemnitee is entitled to mandatory indemnification under Section 00-00-000
of the Code in which case the court shall also order the Corporation to pay
Indemnitee's reasonable expenses to obtain court-ordered indemnification;
or (ii) the Indemnitee is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances, whether or not he met the
standard of conduct set forth in Section 1 above or applicable Tennessee
law or was adjudged liable in a Proceeding by or in the right of the
Corporation or in a Proceeding on the basis that personal benefit was
improperly received by the Indemnitee, but if Indemnitee was adjudged so
liable his indemnification shall be limited to reasonable expenses
incurred.
(c) Exclusions. Unless ordered by a court under the circumstances
described in Section 1(b) above, the Corporation shall not be liable under
this Agreement to make any payment to Indemnitee (i) in connection with a
Proceeding by or in the right of the Corporation in which the Indemnitee
was adjudged liable to the Corporation; (ii) in connection with any
Proceeding charging improper personal benefit to the
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Indemnitee, whether or not involving action in his Official Capacity, in
which he was adjudged liable on the basis that personal benefit was
improperly received by him; (iii) for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy, except in
respect of any excess beyond the amount of payment under such insurance;
(vi) for which payment is actually made to the Indemnitee by the
Corporation other than pursuant to this Agreement, except in respect of any
excess beyond the amount of such payment; (v) for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the
Corporation within the meaning of Section 16(b) of the Securities Exchange
Act of 1934, as amended, or similar provisions of any state statutory law;
or (vi) to the extent prohibited under Section 00-00-000 of the Code or
other applicable provisions of Tennessee law.
2. Indemnification Against Expenses of Successful Party. Notwithstanding
the other provisions of this Agreement, if Indemnitee has been wholly
successful, on the merits or otherwise, in the defense of any Proceeding to
which he was a party because he is or was a director or officer of the
Corporation, the Corporation shall indemnify the Indemnitee against all
reasonable expenses (including counsel fees) actually and reasonably incurred by
the Indemnitee in connection therewith.
3. Determination of Right of Indemnification. Any indemnification under
Sections 1(a) above (unless ordered by a court) shall be made by the Corporation
only following receipt of a written request by the Indemnitee and only as
authorized in the specific case upon a determination that indemnification of the
Indemnitee is permissible in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 1(a). Such determination
shall be made within thirty (30) days from the date the written request of the
Indemnitee is received by the Corporation by (i) a majority vote of a quorum of
the board of directors consisting of directors who are not at the time parties
to such Proceeding; (ii) if such a quorum cannot be obtained, by majority vote
of a committee duly designated by the board of directors (in which designation
directors who are parties may participate) consisting solely of two (2) or more
directors not at the time parties to the Proceeding; (iii) by the shareholders
(but shares owned by or voted under the control of directors who are at the time
parties to the Proceeding may not be voted in the determination); or (iv) by
independent special legal counsel. Such independent special legal counsel shall
be selected by (i) the majority vote of a quorum of the board of directors
consisting of directors who are not at the time parties to the Proceeding; (ii)
if such a quorum cannot be obtained, by majority vote of a committee duly
designated by the board of directors (in which designation directors who are
parties to the Proceeding may participate) consisting solely of two (2) or more
directors not at the time parties to the Proceeding; (iii) if a quorum of
directors not party to the Proceeding cannot be obtained and a committee
consisting solely of two (2) or more directors not at the time parties to the
Proceeding cannot be designated to select independent special legal counsel,
then such independent special legal counsel may be selected by majority vote of
the full board of directors (in which selection directors who are parties may
participate). The term "independent special legal counsel" as used herein, means
a law firm, an attorney, or a member of a law firm, that is experienced in
matters of corporate law and neither currently is, nor in the past five (5)
years has been, retained to represent (i) either the Corporation or Indemnitee
in any matter material to either party, or (ii) any other party to a Proceeding
giving rise to a claim for indemnification hereunder. The term "independent
special legal counsel" shall not include any person who, under the applicable
standards of professional conduct prevailing at the time of the representation,
would have a conflict of interest in representing either the Corporation or
Indemnitee in an action to determine Indemnitee's rights under the provisions of
the Corporation's Bylaws or any agreement upon which Indemnitee relies to
establish Indemnitee's right to indemnification or advancement of expenses.
Authorization of indemnification and evaluation as to reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination that indemnification is
permissible is made by independent special legal counsel, authorization and
evaluation as to reasonableness of expenses shall be made by those entitled to
select such counsel.
4. Advances of Expenses. Except as limited herein, reasonable expenses
(including counsel fees) incurred by the Indemnitee in defending any Proceeding
shall be paid by the Corporation upon written request of the Indemnitee in
advance of the final disposition of such Proceeding if (i) the Corporation has
received a written affirmation by the Indemnitee of his good faith belief that
he has met the applicable standard of conduct set forth in Section 1(a) of this
Agreement; (ii) the Corporation has received an undertaking by or on behalf of
the
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Indemnitee, in substantially the form attached hereto as Annex I, to repay such
amount in the event that it is ultimately determined that Indemnitee is not
entitled to indemnification as authorized herein; and (iii) a determination is
made that the facts then known to the person or persons making the determination
would not preclude indemnification under Section 1 of this Agreement and the
applicable Tennessee law. Such determination and the authorization of payments
under this Section 4 shall be made in the same manner as the determination of
the right of indemnification and the authorization of payment of expenses set
forth in Section 3 of this Agreement.
5. Procedure for Making Demand. (a) Payments for any indemnification to
which the Indemnitee is entitled pursuant to Section 1 hereof shall be made by
the Corporation no later than fifteen (15) days after the determination required
by Section 3 is made that the Indemnitee has met the standard of conduct
required by Section 1(a).
(b) Payment of expenses determined by the court conducting the Proceeding
or another court of competent jurisdiction to be proper in view of all the
relevant circumstances as described in Section 1(b) shall be made by the
Corporation within fifteen (15) days following the date of the order of a court
from which no appeal can be taken or from which no appeal is timely taken.
(c) Payments of expenses to which the Indemnitee is entitled pursuant to
Section 2 hereof shall be made by the Corporation no later than forty-five (45)
days after receipt by the Corporation of the written request for payment from
the Indemnitee.
(d) Advancement of expenses to the extent provided by Section 4 hereof
shall be made by the Corporation no later than thirty (30) days after receipt by
the Corporation of (i) the written request for payment; (ii) the written
affirmation of good faith; and (iii) the written undertaking referred to in
Section 4 hereof; provided, however, that no advancement of such expenses shall
be made if a determination is made that the facts then known to the person or
persons making the determination preclude indemnification under Section 1 of
this Agreement or the applicable provision of the Code.
(e) The right to indemnification or advances hereunder shall be enforceable
by Indemnitee in any court of competent jurisdiction if the board of directors
(or any committee thereof), the shareholders or independent special legal
counsel improperly denies the claim, in whole or in part, or if indemnification
or advancement of expenses is not made within the time specified herein.
Indemnitee's expenses incurred in connection with successfully establishing
Indemnitee's right to indemnification or advancement of expenses, in whole or in
part, in any such Proceeding shall also be indemnified by the Corporation.
6. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee. The Indemnitee shall execute all papers
required and shall do any act or thing that may be necessary to secure such
rights, including the execution of such documents necessary to enable the
Corporation effectively to bring suit to enforce such rights.
7. Insurance. The Corporation shall use its best efforts to maintain
insurance on behalf of the Indemnitee against any expenses incurred in any
Proceeding and any liabilities asserted against him and incurred by him in his
capacity as a director or officer of the Corporation, or arising out of his
status as such.
8. Effect of Changes in Law or Corporate Documents. No change in the
Charter or the Bylaws of the Corporation or the Code subsequent to the date
first above written shall have the effect of limiting or eliminating the
indemnification available under this Agreement as to any act, omission or
capacity for which this Agreement provides indemnification at the time of such
act, omission or capacity. If any change after the date of this Agreement in any
applicable law, statute or rule expands the power of the Corporation to
indemnify the Indemnitee, such change shall be within the purview of the
Indemnitee's rights and the Corporation's obligations under this Agreement. If
any change in applicable law, statute or rule narrows the right of the
Corporation to indemnify the Indemnitee, such change, except to the extent
otherwise required by law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties' rights or obligations
hereunder.
9. Definition of "Corporation". For purposes of this Agreement, references
to "the Corporation" shall include, in addition to the resulting or surviving
corporation, any constituent corporation (including any
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constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents, so that any person who
is or was a director of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
shall stand in the same position under this Agreement with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
10. Successors. This Agreement establishes contract rights which shall be
binding upon, and shall inure to the benefit of, the successors, assigns, heirs,
and legal representatives of the parties hereto.
11. Contract Rights Not Exclusive. The contract rights conferred by this
Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, the Charter or
Bylaws of the Corporation, any agreement by the vote of shareholders or
disinterested directors of the Corporation, or otherwise. The rights granted in
this Agreement supersede any similar right granted under any previous agreement
between the Corporation and Indemnitee with respect to the subject matter
hereof.
12. Indemnitee's Obligations. Indemnitee shall promptly advise the
Corporation in writing of the institution of any Proceeding which is or may be
subject to this Agreement and keep the Corporation generally informed of, and
consult with the Corporation with respect to, the status of any such Proceeding.
Notices to the Corporation shall be directed to Goody's Family Clothing, Inc.,
000 Xxxxx'x Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attn.: Chairman of the Board of
Directors (or such other address as the Corporation shall designate in writing
to Indemnitee), and shall be given by personal delivery or by mailing the same
in the United States mail, postage prepaid, certified mail or registered mail
with return receipt requested. In addition, Indemnitee shall give the
Corporation such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power.
13. Severability. Should any provision of this Agreement, or any clause
thereof, be held to be invalid, illegal, or unenforceable, in whole or in part,
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties. To the extent permitted by law, the
parties hereto waive any provision of law which renders any such provision
prohibited or unenforceable in any respect.
14. Modification and Waiver. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
15. Choice of Law. The validity, interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
Tennessee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ XXXXX X. CALL
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Title: President
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INDEMNITEE
/s/ XXXXX X. XXXXXXXXXX
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Xxxxx X. Xxxxxxxxxx
